The UK Parliamentary Inquiry on e-invoicing – not what I was expecting

I wasn’t expecting a drama but when Sarah Chilman rushed to Nigel Taylor’s rescue following what appeared to be an unprovoked attack with a coat stand, I immediately thought of Wendi Deng’s intervention at the phone hacking hearing when her now estranged husband, Rupert Murdoch, was the target of Johnnie Marbles. “Surely Parliamentary business isn’t always like this” I thought but quickly realised that the coat stand had simply fallen on Nigel’s head.

It was a moment of distraction during an otherwise fascinating session, the first sitting of the UK Parliamentary Inquiry on e-invoicing.

From left to right, Caitlin the stenographer, Luke McKeever from OB10, Tim Coleman from the Federation of Small Businesses (FSB), Nigel Taylor from Taulia and Chair of UKNeF, Nigel Clifford from Procserv and to the far right, the coat stand.

The coat hanger mishap wasn’t the only surprise. The Inquiry that I was privileged to be a part of, sat on Tuesday of this week, the day after an intense, all-day debate hosted by the UK National e-Invoicing Forum (UKNeF) during which I sat with Ian Burdon and Peter Smith, both of whom brought fresh and expert views and insights to the public sector e-invoicing discussion. These two days, the UKNeF meeting and the Parliamentary Inquiry, led me to some conclusions about the direction of electronic invoicing in the UK and they were conclusions that I would absolutely not have predicted.

My preconceived idea was that the UK Government needed to be persuaded to mandate e-invoicing. Mandate the use of electronic invoices by all public sector suppliers perhaps. Maybe insist on it as part of every new contract award. Whatever sort of mandate, it needs to be stronger that the soft mandate emerging from the EU Commission that is looking to require that all public sector organizations must not refuse to accept invoices in electronic format. That’s a little bit half-hearted in my view.

If I’d have been asked to predict the outcome of a show of hands when the UKNeF participants were asked to vote on whether there should be a mandate, I’d have expected the raised hands to outnumber the rest by a healthy margin. But no. When the Chairman Nigel Talyor did just that – it was a split audience.

“How can you possibly mandate that electronic invoices be sent to organisations that can barely process paper invoices properly?” asked Peter Smith. (I paraphrase.) And what exactly do we mean by a mandate? Mandate what? A standard? A particular solution?

And it became even more clear to me when listening to the service providers present to the Parliamentary Inquiry. Of course they’re going to ask for a mandate but the most obvious winners if that happens are the service providers themselves. That’s not the most convincing message.

Getting e-invoicing to happen will require encouragement and it will require leadership but more than anything else it requires political will and that means packaging the messages in a politically acceptable way. After the witnesses had made their submissions, Stephen McPartland crafted, on the fly, arguments that would be universally acceptable. It was impressive to listen to his analysis of the political perspectives of his own party and also of his opponents. This is a skill I haven’t got and it was a really interesting lesson in messaging. The expert view, even the common sense view, isn’t always going to be the one that sells the solution.

Asking for a mandate for e-invoicing is too simplistic but that is not to say a meaningful mandate of some sort is not required. There’s serious money to be saved by embracing digital business processes. We can’t quite agree on which efficiency savings figure is the closest to the truth but we all agree, to borrow OB10’s Stefan Foryszewski’s way of putting it, that whatever the number is, it’s a big number. And while we watch the Latin Americans’ making their own economies more efficient, making it easier and cheaper to do business with them, we in the UK need to take a serious look at our position in the world and consider the consequences of further prolonged deliberation.

The problem with mandating is that it imposes a condition on the supplier.
Imposing a condition on a supplier (if they are not already doing what is asked) will add additional costs for the supplier.
Additional costs for a supplier are not absorbed – they are passed on.
So why not ask the supplier to just do what they do – just email their standard bill. Just email the standard bill generated by their sales/ERP/accountancy software.

The “vested interests” will say that its not “electronic invoicing” and that “you can’t extract the data from a PDF”. Erm….false.

Emailing PDF bill to the likes of us (notice I didn’t self promote)
creates an audit trail
the bill doesn’t get lost
all the data on the bill can be extracted (yes, all of it)
data extraction happens in real-time
imposes no “conditions” on the supplier
etc

I could go on, but I can already hear the vested interests readying a response. But that’s what vested interests do.

I have been present at several B of E and Parliamentary breakfast meetings on e-invoicing and indeed heard and seen it in print that Michael Fallon has instructed all public service bodies to appoint champions and review the area of e-invoicing.

Vince Cable has not been so supportive but believes a way forward could occur for larger businesses. But this is where the problem lies. The UK’s economy (and the EU) is built on smaller businesses sending invoices electronically and the bulk are paid by DD. Therefore what is the problem that e-invoicing is addressing?

Technology providers point to reduction in fraud, faster more efficient straight through reconciliation (not processing) but overall this only applies to larger SME’s and corporates and they have links with Treasury systems through the likes of Oracle/SAP etc.
Therefore we are not like Latin America or even Italy so what is the real problem that e-invoices addresses?

Thanks for the concern Pete.. I am sure Nigel Clifford didn’t intend to try and take my head off the Parliamentary Enquiry is a good exercise and I am keen to see the results, you are right, as expressed on Monday there are still challenges within the industry and leadership with a single voice is required…

On the service provider front, yes I guess they have an interest in this.. but they are not looking for any guarantees – just a commitment from the public sector to do this.. We will all compete for business as usual, and don’t forget.. the work done at UKNeF is all voluntary.

Thanks @Nigel. Yes, we are aware of the good work Cloudtrade are doing. I think there are four companies around the world now (four that I know of anyway) proving that data-extraction from PDF bills is very possible. That said…there are certainly more than 4 organisations saying “its just not possible”. “You must use EDI, PEPPOL, XML, UBL or a load of other acronyms”. Yawn. PDFs are just PDFing great.

If government is serious about electronic invoicing (and I have no doubt they are) then they must allow SMEs to provide them with “electronic invoices” without changing the way they do business. Supplier adoption is key. All joking aside, someone in Whitehall could register uk.government@invitbox.com now, and in 2 minutes every single company in the UK that can email a PDF bill would be able to provide government with an electronic bill that (a) the nice person in government can read – because PDFs are lovely to look at, and (b) that can have all of its data extracted and standardised in 27 milliseconds (but who’s counting)

Now…if only we can get Australian Government to have a meeting about EI.

Much too much credit is given to Latin America in this discussion. e-invoicing operates within an ecosystem of protection of property and the regulation of financial transactions and institutions. The World Bank Group ranks Brazil at 116/189, Argentina at 126/189, Mexico at 53/189, Venezuela at 181/189 in ease of doing business. Chile (34/189), Peru and Colombia, ranked 34/189, 42/189 respectively, ranked higher but there is a lot of work to be done before the majority of Latin American economies can be considered efficient and effective at enforcing contracts, resolving insolvency.
I don’t see the leap to e-invoicing as being useful without a sound financial infrastructure.

I won’t bore you with my whole history of e-invoicing which goes back over 20 years.

However, the way we deal with this problem for all our customers, and which they are delighted with is as follows: They get two versions of the invoice:
The first is an image file for legal requirements
The second is a spreadsheet or CSV file for their data needs

In this manner the standard and can any business do it issue goes away. This is the lowest common denominator solution. It is simple and works every time, as these standards are ubiquitous to all businesses.

As the original instigator of the electronic aligned document set for international trade, a long history with GS1, SITPRO and UNCefact and before that the EDI Association and E-Centre; and as a practicing international trader and businessman the pre-described solution is the only one I have managed to get my global customers to accept. In fact, many of them LOVE it, and wonder why other companies cannot do something as simple for them!!